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tv   Closing Bell  CNBC  August 10, 2017 3:00pm-5:00pm EDT

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house aide, gave an interview in which he said it's nonsensical for rex tillerson, the secretary of state, to be talking about military matters, and that kind of discordance is something that cannot be reassuring to people watching this crisis we've had an odd tit for tat issue where the president said, you know, they will get fire and fury if they threaten and then the north koreans threaten and then the united states came back rhetorically the north koreans then detailed how they would hit qualm and then today we heard from u.s. officials how they would hit north korea, and then you had president trump kind of rhetorical frosting on it. >> all of those things thank you so much, john harwood. bill and kelly when the fire and fury statement happened the other days the markets took it lower. today, not so much >> well, it's not just stocks, as you well know, michelle, and you guys have been itemizing this the vix, almost a three-month high
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the 30-year treasury yield, a six-week low gold, two month high so the safety trade is still very evident in all of this as well thank you. we'll pick it up from here i'll bill griffeth along with kelly evans here at the new york stock exchange as we watch the selloff continue in equities, and we want to address one of the other side bar issues that's been getting the market's attention. president trump, not just on north korea but he's also been raising eyebrows on those comments about senate majority leader mitch mcconnell and the widening rift that continues to grow ylan mui joins us with more from washington and more comments he just said. >> reporter: the president signaling he does not have confidence in senate majority leader mitch mcconnell saying you can ask the question of whether mcconnell should step aside if he can't deliver on the gop agenda, but it is worth remembering that mcconnell actually delivered this administration's biggest win so far, and that is the confirmation of supreme court
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jump neil gorsuch. mcconnell went nuclear in order to get gorsuch confirmed so he's put it on the line for this president. however, it's also worth remembering that mitch mcconnell actually lobbed the first volley in this war of words that he's been having with the president he initially spoke out on monday saying that he rejected the administration's time line for tax reform, refusing to set a deadline for when they would be able to push through this legislative agenda, and this all comes even as mcconnell and other republican lawmakers are facing some real pressure from conservative groups back home. there are new digital ads out today from the koch brother groups trying to rally people around tax reform, so these are two men who need each other at thismoment in order to make sure that the crown jewel of the republicans' agenda of tax reform goes through. i think we have the sound of president trump making those
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comments on mitch mcconnell. >> people like we're underperforming. it isn't because too many kind of artificial deadlines. unrelated to the reality of the complexity of legislating may not have been fully understood. >> so that was sound of mitch mcconnell speaking at a town hall at a forum in his home state of kentucky earlier this week saying, again, that he does not agree or is willing to adhere to this aggressive time line that this white house has laid out for tax reform. now, president trump has repeatedly questioned the ability and loyalty of those close to him you've seen him do this with reince priebus, with attorney general jeff sessions and now with mitch mcconnell, but it's important to ref remember that mitch mcconnell doesn't work for the president soap he's clearly holding his own in this fight, guys back to you. >> you mentioned some of the pressure coming from conservative groups. i don't know the extent to which dean heller of nevada is
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directly caught up in all of this, but we're starting to hear word of approaches to challenges on the right to republican candidates how does that complicate the issue for mcconnell to wrangle everybody together and come to a deal does that kind of pressure help, or does it divide them >> well, what conservative groups are trying to do is make this this issue, that some of those republican senators, particularly you also see jeff flake out in arizona, that they will be -- that they will be judged on whether or not think can get this tax bill through, show mcconnell does have some leverage in order to try to get some of those republican senators on board. you're also seeing conservative groups trying to pressure some red state democrats into perhaps coming on board because republicans have such a thin majority in the senate maybe one or two democrats could help put them over the edge. >> yeah. the frustration is understandable, but the war of words doesn't help get this all done ylan, thanks very much ylan mui in washington. >> let's get to the market with
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the dow down 120 points, the third straight down day for stocks bob pisani has more on the action of the floor here bob? >> so far the monticello are showing signs. today we're seeing f.a.n.g. turn, amazon, facebook, take a look, some of the other big f.a.n.g. names down to the downside this has been going on for a couple of days biotechs and semis week. another group having problem all week are bank stocks keycorp, down 2%, maybe 4 has for the week in addition to the selloff, we've had, of course, lower bond yields that's an issue for them and then we're seeing some of the oil names not getting anything going, even with oil holding in around $49 to $50. a any, another 52-woke lows, is one of the big oil service names. down about 2%, and you want to know how some of the infrastructure plays are, the trump plays, going nowhere vulcan was huge earlier in the year it's been down for a while now down another 2%.
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their guidance wasn't good a short while ago but the plays, the infrastructure plays all dead as the trump agenda has been essentially going nowhere we want to point out we're only down 1% from the historic high for the s&p 500 and that was just hit on wednesday. russell 2000 a little bit weaker that's about 5% off of its historic highs guys, back to you. >> all right, bob, we'll see you a little bit later meanwhile, retail has been a real drag for this market as well after some big earnings out. courtney reagan has some details on that. >> sure. this quarter was better than expected for today's report remembers, but the fundamentals in the department store sector haven't really change. the stocks have had a recent run ahead of today, too, so macy's and kohl's both beat on profit revenue and camps. macy's reiterated its previous forecasts but didn't raise it even after today's stronger than expected results shares for macy's down 10% i asked macy's ceo on the phone why he isn't raising his quarter
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guidance, and he said he needed to see sequential improvement from the first quarter and is now more confident about hitting the guidance i asked when macy's comp sales would return to growth and he said he's not ready to declare the timing on that but he's optimistic about the improved numbers in the quarter. kohl's numbers are down of% after its beat and no guidance there either sales improved for all categories and cat industries. dillard's put up a loss when analysts expected a gain the loss was because the merchandise cost the retailer more this year than last and it sold it for last it still has higher inventory left over. shares down by 16.5% for dillard's. nordstrom is up after the bell, so we're looking for about half a percent comp loss, slightly higher revenue and lower earnings but we'll see what we get. bill, back over to you. >> court, real quickly what's the deal with kohl's? it popped this morning and it looked like a beat and then it
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reversed lower is the that what's happening in the rest of the sector >> and if you look at it individually and look at this quarter, it looks pretty good. we've got a revenue beat and comp beat and we've got a profit beat, but i think when you look long-term, an yists and investors are still saying can kohl's really make it, would still facing the same fundamental challenges that exist in these big box department stores or aggregators selling other brands the brands may do well, but do we really need the box in the long run, and that's some of the concern today. >> all right courtney, thank you. >> yeah. >> and we'll see you later from nordstrom reports. let's get to our "closing bell" exchange a lot to talk about with our group. joining us, jason trennert with strategic research partners, arthur cashin director of floor operations for ubs and rick santelli checking in from the cme as he tallies the results of the 30-year bond auction arthur, how much do you think this is north korea?
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i mean, i'll ask a pretty naive-sounding question. but how much was just the market looking for an excuse to sell off to begin with as well? >> i think the motivation is probably anxiety about north korea and what's going on. plus, the fact that with the mcconnell/trump factor it doesn't look like the administration's all together, and that makes you worry about what's going to happen if we have an at international event here to worry about. but i think you're also right. you've had gundlach come out and say that he's betting on a 3% to 5% selloff before year end he bought puts on the vix because he thinks the vix is going to go from 10 up to 20, so when it began to move, everybody had that as a backup and that i think gave it a booster factor that's why i think the vix has moved quite as much as it has. but the whole concern is what's going to happen out of north korea? i don't know if we have enough time -- i don't mean here, but in -- in geopolitics these sanctions that have been
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on, the koreans have managed to escape them by using certain chinese banks to launder things that are going on. if we can either get china internally or somewhere to crack down on those banks, then that -- that administration and north korea may crack like a plum. >> wow, jason, same kind of question to you. how do you weigh the risks there while still looking for opportunities in these markets. >> yeah, i mean, i have to say, unfortunately, as far as north korea is concerned, i mean, that's a little bit above my pay grade. i'm not particularly -- i guess, i'm not particularly concerned that there's been a real change in our overall policy. i think president trump obviously speaks more plainly than some of our past presidents, but i think the -- i think the overall policy is largely the same certainly the bellicose actions of north korea are a cause for concern, but i -- i would argue that the chances of a real problem with north korea are probably about the same as they were a year ago and two years
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ago and that's just my own amateur opinion. >> jason, that being the case and the fact that we've seen volatility up a little bit and stocks down, if you think there's not really a sea change here, does that mean these are entry points given how well the markets have done up until now we have howard marks meantime warning that the passive trend is, you know, maybe pushing tech stocks too high. >> yeah. >> how does that all come together for you >> i'm actually very much in agreement with mr. marks as far as peak passive. we wrote a summer essay series on this, an i do think it probably is going to affect some of the f.a.n.g. stocks most significantly if it does crack i'm also of the view that you just got through really a second-quarter row of terrific earnings and you can't lose sight of that. market isn't cheap by any kind of normal standard by the same token, you are left with this nagging issue of idea that in a world of no yields or financial repression you're not leaving institutional investors with many other options.
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>> and, rick, three days of selling in the equity market, but during that time you had throw important treasury auctions, are 3s, 10s and 30s, and we sit here at six-week lows know for the 10s and 30s how do you think the markets are weathering all of this right now? >> well, another way to look at it is we're sitting basically at the same level in sos as we were before the employment report was released listen, i don't mean to dismiss the scary nature of what's going on with north korea, but i do think that there's an issue here that i've talked about today about market vulnerability, okay i think many things could be the catalyst for moves even though they aren't necessarily the main reason for the move, and i think that the flight to safety and all the issues of north korea are real, but i do think that the moves in stocks is because the stocks were ready to have the move interest rates, as i said, if this was truly on the scale that we're supposed to really pay
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attention, that geopolitics is moving markets or what trump is talking about, but with regard to the senate and the last vote by one vote missed, if that was all the dynamics, i just think that the markets were ready to move and we're trying to pair things up in a certain order to try to explain it. all these things are important, but i think if tomorrow's cpi is hot, we'll be at 2.30. if not, we'll be potentially getting close to testing the low yield for the year of 2.13 i think these are all important aspects of the market. i don't necessarily think that the geopolitics is directly responsible. it might have helped move the market off the cliff a bit, but i think it was kind of close to the edge anyway and due for a correction >> and by the way, jason, we're just speaking about howard marks and this idea of this passive bubble here's the comments that the oak tree capital founder made on halftime report earlier today. take a listen. >> i think the biggest risk is the fact that the prices are
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high and investors are euphoric, not euphoric but optimistic. there's always things to worry about, but their import is dependant on the level that securities are trading at and the emotion that is embodied in prices >> not a new concept, jason, per se that valuations are high and a lot of professionals have been wary of this market. in fact, the fact that you would label this peak passive sounds to me like you're calling a top when most people would say this is the first inning and there's many, many moring to. >> i don't know if i would call it a top, but i do think stock-picking will make a large comeback that's largely because i think the broad monetary policy situation has led to an enormous misallocation of capital, not the least of which has been a focus on passive investing, and it's worked. it's driven up asset prices to a certain extent, but it certainly
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hasn't worked as far as the average person i think if but get more volatility in both the economy hand in inflation and rates and you have a more normal business cycle, i do think that active managers will start to outperform passive, but this has been an extremely unusual period of time as far as monetary policy is concerned, and it's -- i think it's just recently that we've started to realize what some of the negative consequences of those -- of those actions have been. >> and before we go, arthur, we can't forget that earnings are still coming out and as courtney reagan was pointing out, the retail numbers didn't look so good this morning, and they are taking those stocks down again today. >> actually, the -- the numbers themselves weren't quite that bad. macy's and others, but people are unforgiving. the perception of the death of the mall continues at retail and amazon looming, almost as threatening has north korea, so it's a bit of a problem there. >> all right we'll see you later before the
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markets close. thanks, gentlemen, for your thoughts on today's market action we've got 45 minutes left in the trading session for this thursday the dow was down around 173 on the lows of the session, down 155 right now and all the other major averages low as well let's see the nasdaq is the big loser, down 1.8% facebook, you may have heard, introducing a new original video content platform called watch. up next, we'll look at the already crowded video space and whether people will really watch it. >> plus, shares of snap are down more than 20% since its ipo back in early march we will debate whether this stock can snap back after the earnings report this afternoon. >> and as always, we want to hear from you. reach out to our program on twitter and facebook send us an e-mail. that's our address at closingbell@nbcuni.com you're watching cnbc, first in business world wide. whoooo.
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we seem to be heading to the lows of the session right now in stocks the dow now down 155 points. the nasdaq down 1.8% we'll focus on that in a moment
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here while gold continues higher, that's at a two-month high, and the vix is at about a three-month high above 15 right now. let's check some of today's big market movers. generic drug-maker perrigo, the best performing stock in the s&p 500 after reported better than expected earnings, and it raised its full-year guidance thanks to its over-the-counter products and new drug launches. that stock up 15% on an otherwise big down day and then there's shares of blue apron plunging after reporting earnings for first time as a publicly traded company. the meal kit delivery company reported a wider than extent abouted loss because of an 86% increase in costs. blue apron shares are now down a whopping 46% since the ipo that was just on june the 29th and today down another 18% here, kelly. almost as five bucks we have a breaking news alert on venezuela. michelle caruso-cabrera has those details. >> credit suisse has prohibited
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their staff from trading certain venezuelan bonds due to representational risks this is an internal memo that was sent to a small group of traders in switzerland according to their pr department, three different particular venezuelan bonds, representational risk, what will it be? goldman sachs took a lot of heat for making a market in bonds that were unloaded by the venezuelan central bank as they searched for cash. there was a lot of heat taken for that by goldman sachs. the other issue is that a lot of venezuelan bonds are actually widely held among venezuelan senior officials, and there are concerns, and this is not coming from credit suisse, this is from my reporting that there's a lot making it out of the country, and they have provided tremendous returns, each as we see this horrendous video that constantly comes out of the humanitarian crisis. that's venezuela the country keeps paying the bonds and last year some of them had returns of 50% and 70% because the yields are so high once again, credit suisse
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prohibiting staff from certain venezuelan bonds due to utational risk. >> technology shocks down and nasdaq is the biggest underperformer kate rogers at the market site with some of the big movers. >> reporter: we're down around 1.8% the biggest loser in the day sen tech which is really weighing. netflix down around 3% and disney said earlier this week it's going to be pulling its movies off the platform come 2019 facebook is also down around 2%. the company announced last night its plans for watch, that new platform, a new way for users to watch videos on the social network, and all the rest of the f.a.n.g. names, apple, amazon and google, all of the three major players also down between 1% and 2%. guys, back over to you. >> all right, kate, thank you. speaking of facebook, the company hopes you will watch its new home for original video content, and that's what it's
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called, quote, unquote watch julia boorstin at the headquarters of one of its rivals, snapchat, because they do have earnings coming up i thought when i saw facebook watch i thought it was like an apple product but it's really youtube that they are taking on here. >> reporter: does look like youtube and snapchat as well will see more competition in the content space. facebook has unveiled its watch tab. this is its new home for video content which will roll out to u.s. users starting today. recommendations will be personalized based on user interests and what friends are talking about, and the series will be both live and recorded, and they are designed to spark social chatter content partners include a & e with a dating show and national geographic with a science show and mlb with weekly baseball games, among many others from a business standpoint this, shows facebook looking for a piece of the $72 billion that will be spent on tv ad in the u.s. alone this year
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facebook will will split that ad revenue giving 55% to creators keeping the rest, and facebook says it has funded some shows to help develop this ecosystem. now, facebook's watch is more competition for youtube which has been investing more in professional content as well as snap which has been adding to the shows that it runs on its discover platform. and though facebook's video will be ad-supported, unlike novelsics, it shows another player getting into the crowded video streaming space. for facebook, adding video content is all about trying to keep users within its app so they never have to swipe away and go to any of those other services, whether it's snap or netflix. kelly, back over to you. >> we'll see you a little later. >> hand regards to your new producer who is enjoying the beach in venice. private joke. >> we miss you. >> uber, benchmark capital is suing former ceo travis kalanick
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for fraud. that from axios's. >> benchmark capital is one of the first investors in uber and is on the board of directors today in court they tried kalanick for breach of fraud and fiduciary duty when travis asked for the board to be expanded with travis getting the three extra seats and designating them himself, he did not give material information that uber subsequently learned, information about sexual harassment, et cetera and now they are asking the court to invalidate the seats, one of the seats held by kalanick himself. >> wasn't benchmark trying to reassure everybody at uber i guess that they are in it for the long term? there's season such tension between the two already, hasn't there? >> there has been and certainly kalanick and benchmark have been on opposite sides for month, maybe longer than that
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it would benchmark the kind of the spearhead of the investor group that really got him to resign in the first place. there's been a lot of talk that benchmark might sell its shares to softbank or another party this lawsuit doesn't refer to that at all. there's a lawsuit to be made if they sell out tomorrow why bring the lawsuit? it wouldn't be in the company anymore. >> is this just a strategy to get kalanick off the board >> that's exactly what it is they -- they want kalanick off the board in part because they believe and they say this in the lawsuit that his presence on the board and as part of the ceo search committee has made it more difficult to get a ceo. >> clearly, they don't want him to pull a steve jobs as apparently some reports are saying they want him to do and come back to the company as ceo again. >> he's been talking a lot about that to people or has been for the last couple of weeks and benchmark certainly doesn't want that this is an effort certainly to nip that in the bud, and as part of this, look, lawsuits obviously take a while but they are asking the judge in this to
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issue a preliminary injunction which would block him from any and all board-level discussions immediately. if that were to happen, he wouldn't have a vote it would be impossible for him to steve jobs it. >> so, dan, this is a pretty extreme maneuver, wouldn't you say, just in terms of venture capital community to have somebody who has backed, you know, all the way through uber as it's kind of preparing for its ipo, trying to kind of shore things up and really clean it up and get things ready there does this help or hurt that case ultimately >> i mean, ultimately if indeed -- if you believe that this will help the company get a ceo, and by the way, get a ceo means that they can get a cfo and today their vp of operations stepped down they have a lot of positions to fill hand you need the ceo first for all the other dominoes to fall it will might make the ipo go a little quicker or get there, but as you said, it's incredibly unusual for a venture capital firm to sell a founder and yet
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alone a board member a lot of these vc firms talk a lot about being founder friendly this certainly is not that >> yeah, especially before the ipo when they have still got the money on the hook there. dan, thanks. appreciate it. >> thanks. >> fascinating story. >> what a mess. >> we'll see what happens, as you said they have a lot of positions to fill. >> you saw the list there. >> and this is a company that has such competition they need to be out of the leading edge of that everyday fighting across so many fronts and they don't even have the personnel. >> lyft is lifting its chops. the dow is down 164 points we're near the lows of the session. we have seen more of a selloff after president trump said if anything his remarks should have more strident against north korea. you have the nasdaq, the worst performer today. down 1.8%. semiconductors, biotech, a lot of the risk-heavy part of the market is doing quite poorly the s&p is down 30 points and the russell down 21. >> after the bell, earnings from snap, but before that we have a
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debate on whether that stock is deadon r meyight now that's coming up [car tires screech] [bell rings] alzheimer's disease the fi is out there.survive and the alzheimer's association is going to make it happen by funding scientific breakthroughs, advancing public policy, and providing local support to those living with the disease and their caregivers. but we won't get there without you. visit alz.org to join the fight.
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(bell ringing) just about 30 minutes left in the trading session with the dow down 157 points near the lows of the day, and joining me on the floor of the new york stock exchange here. we have allen valdez from silver bear capital
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i'll ask you the question i asked art cashin how much is the north korea tensions, and how much was a market that was vulnerable to selling anyway >> i think it's more the north korea tensions really pushing on the market we're at an all-time high. earning seasons coming to an end. you expect to see a selloff, down like 165 earlier. vix, which was trading in the high 9s, now up at 16 and change here, so, i mean, things are -- you know, i think that's all due to north korea. >> do you see any opportunities here >> well, you know, it's kind of late but we bought gold in the beginning of this talk. >> okay. >> we knew it would get a pop. all the save havens they run into, but i don't think it's going to be long lasting i think all this talk. we're a hong kong-based firm, and these guys don't believe that the tensions are really going to escalate into a full-blown war or attack on guam or anything like that, so i think we're buying gold because it was a good run, but we're taking a look. >> that's what ray dalio is saying to do as well today. >> yeah. >> buy gold.
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best humming against north korea. kell >> thank you both. >> let's get over to sue herera with our cnbc news update. sue. >> hi, kelly here's what's happening at this hour, everyone louisiana governor edwards and new orleans marilyn drew giving another round of updates on the flooding and reduced pumping capacity for the east bank of new orleans after power to a turbine was lost it comes as more rainstorms rolled through the region. >> obviously this is a serious situation, but it's not something to be panicked about we're going to do everything that we can to lean forward and be as responsive as we can be to make sure that we get through this next period of time without undue problems >> music star taylor swift took the stand in a civil trial alleging former radio deejay david mueller touched her inappropriately during a 2013 pre-concert event in denver. she testified he groped her when
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she posed for a photograph and then she tried to get as far away from him without stopping the event. the milwaukee bucks and harley-davidson announcing they will team up for a jersey patch sponsorship, the first time in nba history the nba will allow teams to partnership with companies for uniform partnerships you're up to date. that's the news update this hour kelly, back downtown to you. >> our sue herera. dow down 1616 and we're down close to the lows of the session. >> more than a 1% drop in the s&p and 2000 president trump challenging foxconn's deal to build a plant in wisconsin now the state legislature may reject t.find out why. >> snap is set to report earnings after the bell tonight. coming up we'll have a debate on asnpir you should be apng upnd they are giving me all the good lines today this is good
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welcome back session lows for the market. the dow down 1870 points, one of the largest drops we've seen in some time. it's been a very quiet summer for the markets, but the nasdaq is almost rivaling that drop
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with a 129-point decline the nasdaq is down more than 2%, russell down 1.5%, the s&p down 1.33%. all of this reacting to earnings this morning we have some more headed our way right after the bell that includes snap, nordstrom and nvidia, one of the best performers lately, but companies like nvidia are the other part of a risk-off day. nordstrom down 4% and snap off 1.5. let's talk more about nvidia's earnings his firm owns the stock. appreciate you being here, james. talk a little bit about what you're looking for oh, we'll go back to james in a moment. >> i thought it was just me that i couldn't hear him. >> it was both of us but we'll have more on that as we mentioned there's a couple of names including nvidia, snap and
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nordstrom which report after the close. nordstrom down significantly because of what's happening in retail the market issues for rest of the session were completely separate from that hand had a lot to do just in the last hour, hour and a half with comments from the president at bed minister >> and it goes in waves. some of the earnings looked so good for had a while and then now we're in a period where some of the ones coming out are not so good. retail a good example and blue apron another one. >> a tougher part of the season, given the trends of late how about iphone component maker foxconn planning to open its first manufacturing plant in wisconsin or is it it's an incentive package worth $3 billion but a new report from the non-partisan legislative fiscal bureau says it will take wisconsin to break 25 years on this deal, 25 years, hand in an interview with our own brian sullivan governor scott walker seemed confident that the package would get passed, listen. >> 13,000 jobs paying over $50,000 a year plus benefits, $10 billion economic investment over the next 15 years that's on top of another 10.5
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billion in payroll are the trade-off is 3 million in incentives that they pay as they grow it's a good deal i think the state legislature -- >> when will the vote happen, do you think? >> we'll get it done this month. >> joining us, we hope, is matthew mitchell, a director at the murcato center saying ultimately this foxconn deal would be bad for the american economy. why do you say that, matthew >> in many ways the deal really undermines the core strengths that made the american economy the envy of the world in the first place, open, competitive playing field, one in which anyone can start a business and importantly a level playing field where no firms benefit from government privilege or favors over others. >> so this -- there's been this long going debate about whether it's worth it for the incentive packages to attract a lot of these companies, matthew, as you know this one just seems to be at such an extreme that maybe it --
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it indicates that we've gone too far, so what would make this deal worth it to you i mean, what happens if it turns out like bmw's plan in south carolina like whatever the incentives were to get that done and now that's a whole automobile manufacturing region? >> i should add there's a political debate about whether these things work or not there isn't much of an economic debate my colleagues and i have recently looked at over 180 studies of targeted economic development studies, every study we could put our hands on and the overwhelming evidence things don't generate any kind of widespread prosperity or anything it, and the reason is, you know, when a private investor is investor her own money in her own project she's very careful about her decision, but when governors and presidents are gambling are taxpayer money, they are neither worried about costs nor are they worried about benefits >> you know, very high-profile news conference when it was said that they were going to be
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creating all these jobs. do you think he really meant to do this with all these incentives in mind i mean, what happens if -- if the legislature in wisconsin turns this down. do you think they go elsewhere, or can they still get something done here, do you think? >> they might. here's the interesting thing of course, you know, a politician wants to be able to push a company into making a decision because if they don't, if the company was going to make the investment anyway it looks like it wasted money really is a double-edged sword because if wisconsin gets the job because of subsidies that, too, is bad, and the reason is it's not a sustainable business model for economic development the last thing this a country or a region or a state wants is a bunch of jobs there that would not exist but for the subsidies. you know, with enough subsidies the governor could get orange growers to relocate in wisconsin, but that wouldn't be a sustainable plan in order for long-term prosperity. >> that's not a fair comparison. >> got to bring in orange trees with you maybe some of this economic development has to be pushed in order to spur much more lasting
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supply chains that could actually benefit the area. >> so there's no doubt that -- that policy-makers can pursue policies that are pro-growth, but the best evidence suggests that these are things like general policies like lower taxes, a broader tax base, sound regulatory environment there's nothing wrong with that in order to spur growth but targeted incentives. the evidence suggest that they don't work because they force firms into making bad decisions. >> all right. >> matthew mitchell, thank you appreciate your thoughts today. >> appreciate it so much. >> on fox crop we'll see what happens with that vote heading to the close with 17 minutes left the dow just off the lows of the day, down 171 is we had heard an occasion that market and close order were to the sell side. we'll get the numbers for you in a while. >> see if anybody wants to buy these dips. >> snap is headlining another big earnings party after the bell, snap,nordstrom and nvidi and all the instant analysis for
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those results coming right up. stay with us we, the people, are tired of being surprised with extra monthly fees. we want hd. and every box and dvr. all included. because we don't like surprises. yeah. like changing up the celebrity at the end to someone more handsome. and talented. really. and british. switch from cable to directv. get an all included package for $25 a month. and for a limited time, get a $100 reward card. call 1-800-directv. hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go.
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okay lows for the session, but here's an indication of the kind of day we're having these are all 100 components of the nasdaq 100, and what did i hear nine -- looks like about seven are positive right now. >> everybody else is negative today as that index is down more than 2% at this hour. >> yeah, netflix among the worst performers a market flash on amazon let's get to that with our leslie picker. what's up? >> reporter: hey, kelly. amazon is the one making the news, but other companies are the ones fearing the effect in the market this time it's live nation i want to draw your attention to the intraday stock see that tick down just a few minutes ago after a report that amazon is seeking to partner with u.s. venue owners to sell tickets directly to consumers. shares of live nation have
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reversed earlier gains on this news the company ownsing ticketmaster which has a pretty strong grip in the ticketing business. it the appears from this report which is by reuters that the conversations over amazon getting into this business have stalled, but yet again it's another example of amazon moving in and other companies feeling like they need to react, at least in the stock market. kelly? >> yeah, big drop in live nation which is so higher but relative to after hour training. >> thanks, leslie. leslie picker. >> 12 minutes left dow down 180 points, and everybody else lower as well. >> and snap shares are sinking 20% since they went public back in march we'll debate whether it's time to buy the stock afthead of the earnings after the bell. whoooo. looking for a hotel that fits...
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binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv on every screen is awesome. the xfinity stream app. all your tv at home. the most on demand your entire dvr. top networks. and live sports on the go. included with xfinity tv. xfinity, the future of awesome. skwoirks art cashin stopped by a moment ago and said that the market on close orders show an imbalance to the sell side by $600 million i think we're already seeing the results of that. the dow is almost down 200 points a moment ago, now down 184 with about eight and a half minutes left and there it is down to 21,864 shares of snap down 1.4% after the earnings ahead of the bell
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tonight. wall street is expecting an increase in users and also a loss this will be the company's second earnings report since coming public in march if you're keeping score, that stock, in the meantime, is down 20% since that ipo. >> joining us now to debate whether this buying opportunity is our bull today and a member of pivotal research group who is our bear. >> james, we'll start with you what's the user growth that you're looking for how important is it and why do you think the stock survived >> the growth we're looking for is 5 million sequential ads to get you to 1771 million. a little below a touch for street and the bigger story is can they monetize the users at a better clip than expected because the users are coming from the most affluent markets in the world when you look at what's happened with the expectations over the last couple of months, they will drop down to a very rock bottom rates, we think, and at the same time we have the short interest which despite the 30%, so we've
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seen a setup similar to what twitter was last quarter where expectations were low and if we're anywhere near the realm of parity then i think you could be in a position for the squeeze. >> even with the decline in stocks since the ipo, you're still bearish on this company. why? >> i have a $9 price target on this stock it's just a matter of the fundamentals and the valuation that my cash spits out i think the company can execute well over time i give then the benefit of the doubt over that. they can be a decent size niche player in digital advertising and getting them to 6.5 billion of revenue in 2023, assuming a margin lower than twitter's at maturity, because, remember, they are not matching their own infrastructure they will have higher content costs. i get them to roughly the same kind of cash flow that i get with twitter and discount it back to the present. valuation gets me to around $13 billion or so against 1.6
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million shares i think you need to account for more dilution than most investors give them credit form. i get to the a $9 price target. >> james, also, as you respond to that. >> yeah. >> just curious when you say the user growth might be a little soft but you're focused on the monetization, is that really the most important thing isn't it so much more important for the company just to show that it can keep growing >> yeah, it's going to keep growing, but you want to see the path towards a billion dollars in revenue this year bottom line, this is a make-or-break quarter. if they start to throw excuses of seasonality and what not, that may throw a wrinkle in the story, and you also have to think about the fact, you know, in the grand scheme of things, we're talking $200 million of revenue for the quarter and $100 billion plus advertising revenue for the quarter. a drop in the bucket. >> how about one more word that might be a problem for them this, facebook >> yeah. i think 100% of snapchat's problems is self-inflicted if they were doubling down on
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their strengths, the content and -- and the experiences and shoving the new product iterations down customers' throats rather than trying to -- >> you think they could do a better job than instagram has done to try to replicate all they are doing >> i think they need to do a better job educating the consumer, and they need to do a better job counseling down on content but they do have a better pulse on mobile experiences than i think facebook does so it's do or die but snap has to check itself in the mirror. >> and you wouldn't put your grandmother in it. >> i would not put my grandmother right now. >> thanks kakmak and brian weizer. >> we're coming back with the closing countdown with the dow down 112 points now. e- and we'll discuss whether the threday selloff is a red flag or a buying opportunity. keep it right here you're watching cnbc, first in business worldwide
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♪ ♪ i'm living that yacht life, life, life ♪
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♪ top speed fifty knots life on the caribbean seas ♪ ♪ it's a champagne and models potpourri ♪ ♪ on my yacht made of cuban mahogany, ♪ ♪ gany, gany, gany, gany ♪ watch this don't get mad (bell mnemonic) get e*trade and get invested just inside the two-minute mark as we head towards the close. let me show you the s&p instead of the dow because it was jeff gundlach who said just the other day that he had bought puts on the s&p 500, expecting a decline, maybe as much as 3%, and he's making some money today. you've got half that decline right now. he also thought that by the end of the year we would see a
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doubling of the vix. it was at 9 or 10 at the time, so it could go to 20 we're almost halfway there now we're more than halfway now with it above 16 today, so a good call, jeff gundlach. the ray dalio said that gold is the best helping right now for anybody wanting to hedge their portfolios against what's going on with north korea and that continues higher today, almost up 1%. bob pisani, we now have earnings coming our way, including are, i mean, nordstrom will be interesting to hear and, of course, snap nvidia was one of the hottest stocks beginning this year. >> and that's a tough earnings call to listen into because it's all about the tech business and the semiconductor business i just want to point out we had a cligtly higher volume today than normal and there's a good reason volatility was much higher the dow has only been moving in the 100-point range from high to low recently today it moved in a greater than 200 point range from its high to the low in the open. that attracts attention, and
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there you go that brings in volatility, and that's why you get that. we had higher volume and a lot of the big etfs like the spdr and the other ones like the russell 2000 but, bill, still only 2% off the historic highs for the s&p. >> down 200 in the dow first time in a while we've seen that stay tuned for all the earnings coming up on the second hour of the "closing bell" with kelly evans and company. see you later, kell. >> thank you, bill welcome to "closing bell," everybody. i'm kelly evans. markets having their worst day since may with the dow dropping 200 points, a quarter point shy of that level so that's a 200-point drop for the dow 21,848 for the blue chips, and they were the best performer relatively speaking. as you can see the nasdaq shedding more than 2% of its value to close at 6216 the s&p 500 down 35 points to 2438 the small-cap russell 2000s down
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about 25 points today to 1372 it, and the volatility gauge which had gone nowhere for months spiking four, almost five points today and the vix nearly at 16. a lot of different dimensions to key on by the way, the interest rate, the ten-year yield falling below 2.2% today we'll have much more on what's moving these markets we're also about to get more major earnings reports julia boorstin is standing by to give us results from snap and courtney reagan from in order drom and leslie picker on nvidia thank you, guys. we'll see new had a emt movement joining us us on the panel we have michael santoli and dan morgan is here, senior portfolio manager and vice president of snowist trust company and the chief executive officer of matrix asset advisers joins us as well. big declines i said the biggest declines and percentage returns for the major averages since may, and the
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major thing to me is we didn't have buying on the close at all. we had people selling. people ready to buy the dips but not like there's many dips to pie here. >> the extraordinary thing about this market is not that we're down 1.5% or so in the broad market it's that we haven't had more of that these days. hovering in the market for three weeks with the late-day rallies, with the sector rotation holding it up. there's a chance it a today is perhaps a mark of a changing complexion of this market. you're also seeing it with the volatility index go up in my upon a lot more than might be expected based on the percentage of the decline. >> is that key positioning. >> partly it is, and it's the novelty effect of we've been so calm for so long and now we have volatility there has been a crowded trade and people betting on continued calm markets some of that have got under wound and you saw the bond yields down and saw the japanese yen rallying and a general risk-off flavor with what's been an unusually calm market the declines are getting worse,
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the dow is dropping 204 points on the bell now. again, 21,844 is where that leaves us. dan, i mentioned what's happening with interest rate you look at a company like brighthouse spup out of metlife. what's worst things that happened for them, interest rates drop again so many different companies in this environment that are just going to look at the environment and say give us a break. is the drop warranted given everything that's happening geopolitically and otherwise >> well, i would expect interest rates to be under pressure with what's going on with north korea. obviously that kind of throws a dent into everything in terms of going forward, in terms of geopolitical risk, and, you know, the fed obviously, we know what their position is, but if you look at the bond market, obviously participants are betting every time the fed raise the short-term rates we see the ten-year going down so in terms of yield it seems like, you know, we're getting a little bit more of a feeling of things slowing down i think that's why you were mentioning earlier about the
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market has pulled back the last couple of days obviously we've got a lot of things to get ahold of. >> david, do you think that there is a deterioration in the u.s. picture, because if not these are -- a lot of this swirling about this afternoon as the president was coming out speaking about north korea, addressing his fire and fury comments from earlier the week and saying, if anything, he should have been more severe in his rhetoric that. seems to have pushed us lower. if that's the reason, does that tell you that maybe there's an opportunity, or do you think that's just part of the reasons why stocks are selling off today? >> well, there's absolutely no change in the u.s. economic outlook, and there's no real reason short of the geopolitical risk that bond rates should be going lower. we thinkthat the reaction the last few days does relate to north korea. we think ultimately and we're more hopeful ultimately that the situation settles down, and that shouldn't have long lasting impact on the financial and equity markets. >> so that would leave you where on the equity markets in general, david >> we think that you've had a
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great run in the first seven months of the year we think the markets are going to slow down in the back half of the year and we think there's a lot more volatility, days like the last knew will be quite normal we think the growth stocks which have been on fire will slow down we do think there's opportunities to buy the lag yards this year and higher lagging stocks and that's a good place to put your money. a reminder that stocks can have volatility, not an indication of a change in direction. >> a couple. other sectors to watch today, just as gauges of what's happening. we talked about gold earlier that's an obvious one but the biotechs selling off, semiconductors and obviously retrenching are. we saw the nasdaq down more than 2% today for anybody who has been watching this entire run-up, again, is that something where it's that the correction that you're waiting to get in on, or is this something different? >> look, there's corrective action going on. there's definitely been these hidden pullback in the different
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sectors and the semis and biotechs have had the great runs are. who are the last people to buy these things, the people who bought them because they are going up guess who is the first to sell them and it's not at this point about the fundamental argument of is it a buy at this price or not. it's about tactics and positioning so that's what's happening in those groups. i agree that the north korea situation could have been kept as kind of a one-day flirt and now it's got some momentum to it it's going to continue to be a story, but this market, as we've been talking about, has been fighting an undertow of the average stock underperforming and sell on the news reflection to earnings and now in the tags of earning season and heading into the tough seasonal period where you have some noise happening in congress, too. >> dan, especially on the point about congress, a couple of things that happened concurrently this afternoon. the president did ramp up his rhetoric on north korea an at least he certainly didn't back down the other thing was he mentioned the senate leader mitch mcconnell, they have been engaged in a war of words this week he doesn't sound pleased about
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health care not going forward and almost said hey, if he doesn't get tax and infrastructure done you can asked ask me if he should be senate leader? is it possible that the market would be more bothered by that, that there isn't agreement >> we'll get a cut not a corporate tax rate r.until below 23% would be a positive it you know, mitch and president trump are going back and forth, you know, and an infrastructure bill would be awesome, so there's still these things on table and any time you get the spook of what's happening with north korea, and then you get these guys going at it it. you know, and the market has gone up so much so i think it's only natural that we get a pullback here. but i think the things are still intact at this point hopefully they can get it done before the mid terms. >> so where does that leave you, dan, on opportunities in this market what do you think they are >> well, you know, i with agree with your other guest.
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i think, there's some opportunities and stocks that have really run up that had good earnings reports you know, in terms of some of these higher profile names, google, amazon and so forth, and in terms of, you know, the market overall, we've been kind of at least holding back a little bit, waiting for things to wreck it's been hard to jump in it, you know, with the stocks making the all-time highs hand now we're starting to get the market to roll over again i think it creates opportunities. >> okay. >> i agree with your other guest. the fundamentals have not clanked. >> michael, at the same time, we did get the inflation report, producer price and wholesale price. the actual index and core index fell in july we get cpi in the morning. we know productivity, front page of "journal" and job claims super strong and job openings at an incredible high. >> yes. >> so whatever the fundamentals are is money in the first place and i wonder if that didn't happen, the rate environment and the market environment. >> definitely has an overlay to what's going on here the sense that we're not seeing
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acceleration, so if you really step back and say earnings were great on a year-over-year basis, up double digits this past quarter's earnings are only up 8%, 9% from the quarter three years ago. in to 14, the market is up 25% what do we need to get prices higher from here or get earnings growing from here? we need the global top line to start moving again, and this is the earnings we got when you had this sort of synchronized expansion in developed economies earlier this year. we need more of that this year, so if these numbers don't cooperate with that outlook, then you have to change it a little bit. >> earnings season, nordstrom's earnings are out let's get over to courtney reagan with those numbers. courtney >> reporter: nordstrom will end up being the positive highlight of the department earnings today, reporting 65 cents a share, beating analyst consensus on stronger than expected revenues $3.79 billion. wall street was looking for 3.75 billion, and check thissous. comp store sales positive, up
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1.7% analysts were actually looking for a decrease of 0.4% nordstrom also updating its guidance, so the mid-point of the earnings range for the full year is still below consensus, although the net sales number is now above consensus. shares here moving after hours, more than 3.5% for shares of nordstrom. kelly? >> thank you a little bit of a pop there, dan. this whole week has been sort of one step forward and two steps back for retail investors who might think we've been too negative, and then you get the moves in macy's and some of the other sectors today, right >> yeah. the nordstrom report looks really good. a company that struggled recently they had gone through changes to try to get earnings growth back again so it looks encouraging that they came out with this good report. retail has obviously been a tough group over the course of the last couple of years and everybody talks about the amazon impact in terms of on these companies and i know they bring that up a lot in the conference call and good to see nordstrom's
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coming with decent numbers. >> david, what would you say >> it's been an odd earnings season 73% of the companies that beat expectations and for those that beat on the bottom line and top line, they had a 1% bias and we wouldn't read too much into the retail earnings and kohl's was pretty decent and yet the stocks were miserable we don't november how nordstrom is going to react until after the conference call, but the data from the last releases has been pretty promising in a bad environment. we're not crazy about retail here. >> let's turn over to snap whose earningsing are out. julia? >> secretary quarter results missing expectations and we're seeing that. they added over 7 million users. now that two million less than
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wall street executives reported. they projected an adjusted loss of 16 cents a share. now, revenue falling a hart short of exagentation. that is the a is 53% increase from a year-ago quarter and still less than wall street expectations the key metric of how much money snap is making from its users that came in at $1.5. that's sue cents less than analysts expected but hosting costs did not increase much. 61 cents per user. that's just a penny more than they reported in q1, and the company says user engagement was strong we see snap shares bouncing around in after-hours trading. they dipped, and now they seem to have recovered a bit, but i will be talking to snap's chief strategy officer imran caan. i'll be back in a couple of minutes with his comment
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guys, back over to you. >> looking forward to it, julia. thank you, by the way, snap rebounded. initially dropped 3 to 4 percent and points and now that's lower. what are you looking at here on snap >> looks like a mixed report i was looking for something better than po minutes they lost money which they continue to do but going forward it looked like it was too bad. i was looking for revenue revenue. it's tough because snap trades 30 times price to sales ratio and they are not expected to make money or be cash flow positive until 2030. it's hard to gauge because they are not profitable. >> it's a classic dilemma.
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>> this is a company that came public very early in terms of its business and you can look at other momentum factors like user growth which did not really hit expectations and like revenues per users, so it seems more of a miss than a hit on these, but the stock is down so much and so much of anticipation after the ipo lockup expires, there might be another flush of selling. i think it's trading on those dynamics as opposed to where does the stock find stabilization, not because of this quarter but because it's priced in, too much bad news, mr. katz, is matrix in snap? >> happily we're not in the snap we think there are questions about the longer term prospect, even though the stock is $13 billion, $16 billion, it's pretty sizable for their revenue base we' we're like google right now and microsoft. >> the if you want to even go on
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the social networking side of it, dan, i thought it was interesting in "the journal" today they were talking about how facebook has a whole coined of early alert system for apps like house party that are doing really well. we've already seen potentially what they have done to undermine snap's growth, right >> yeah. i mean, facebook is such a formidable foe for snap. last quarter facebook did $9.1 billion revenue in advertising and it's probably $175 and 180 million for snap just to give you an idea of the difference in side it's such a tough force for them to go up against it's kind of like microsoft used to be in it the technology space, and other people would try to compete against them and it was just so tough. >> yeah. >> and it's almost like you think can anybody knock facebook off, and can snap do it? we just have to wait and see. >> snap is down 6%
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so it's been a volatile one after hours already and we don't know anything about the call. >> as i said, you have this shad, o of this lockup expiration and nobody knows how much the swm -- it's not really about mix pentagon hop this quarter's results. >> julia mentioned she would speak with snap's chief operating officer and i believe she has and can join us now with the comments. >> the snap's strategy officers say we continue to make good progress and improving the scale and effectiveness of our tding business as place forms more than doubled q2's numbers with 1 million of the 7 million active daily users are coming from north america
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which is the most valuable market for them. a couple key point, spending from existing ad customers growing, the service is getting -- that's also key because it allows them to scale and hum they are having to buy the grow ads sales force snap view, time spent in the app and visits per day are all up in the quarter and year over year we still see that stock trading down 7% in after-hours trading of course, that's on the earnings and revenue miss as well as the user growth coming in lighter than expected i suspect in the earnings call which starts at 5:00 p.m. eastern, there eate love of questions about how they are fathering in term of xelgsation and those comments highlighting
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a position of strength. >> our julia boorstin now. dan morgan and dave prooit, thanks for joining us at this pour appreciate it. >> president trump is making more necessary on in the. >> well, kelly, that he had lines are coming out of products that the mate wade with -- and his we have of cav and he said let's sea what he does with guam talking about north korea and its leader kim jong-un. he says he wants to denuke the world but until such a time we'll be the most powerful nuclear power by far he also says again he's not going to broadcast what the administration plans to do regarding north korea. he says he has confidence in general mcmaster who has been reported to be at odds with other members of the administration like steve bannon
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on issues like the strategy in afghanistan and matters of national security. the president also saying that he is very close to a strategy on afghanistan going forward he was asked about the russia investigation. he said that he respects what the investigators are looking into and the process that they have going on, but that they are investigating events that in the president's words never happened on the raid overnight of paul manafort, the former campaign chairman's home by fbi agents, he said that was very tough stuff and that it surprised him. we'll see exactly what the president had to say when the video comes in in a few minutes, kell de, but those are the top headlines from the president's remarks this afternoon. >> all right kayla, thank you mike, we expect we might hear more in a bit.
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we spoke about some of the personnel issues with mcmaster and talk about using more private contractors. >> the idea saying we'll see what north korea does on guam. you can actually place that on an atax-exempt tempt of de-escalating this thing, right, because i don't think anybody in the world thinks that the leadershipch north korea -- they are -- they have one shot. it's going to be a skirmish in guam because then it invites some kind of response. if the ball is in your cool, let's speak this down i just spoke to my national security team, maybe that's cooler heads. >> and after the dow closed at the lows of the situation with all of of this swirling about. deirdre bosa has a report on uber now what's happening >> reporter: hi, kelly and mike. we now have a statement from a spokesperson for travis kalanick, the former uber ceo in response to beverage mark suing kalanick for fraud brought this not long ago. the lawsuit is completely
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without merit and riddled with laws and accusations benchmark's lawsuit is a transparent attention to debasketweave travel kalanick as a sounder and shareholder and to silence his voice regarding the management of the company that he helped to create. it lastly says that travis will continue to act in the interest of uber and all of its stakeholders, and it's confident that these entirely baseless claims will be rejected, so in no uncertain terms, kelly and mike, a spokesperson hitting back hard in the lawsuit that came out from benchmark. we'll see how it goes. a very heated case right now that's been going on for some time and now it's all out in the open. >> thank you travis kalanick trying to hold on to his board seat you just heard about snap. we'll break them down in depth
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with a former shareholder, a true hatary you can call it and a seasoned market vet. that's coming up in just a moment meantime, nvidia's 12-month performance is number one for the ensire s&p we'll go behind the earnings and see what made it such had a hot stock and we want to hear from you. reach out to the show via twitter and facebook and there's the e-mail closingbell@nbcuni.com we'll be right back. is this a phone?
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we've heard from nordstrom and snap hand now we can hear from nvidia and leslie picker has those results. >> hey, kelly, a very solid beat on both the top and bottom line for nvidia let's run through the numbers. on the p-s side, the company reported a $1.01 adjusted compared with about 70 cents of estimates from the analysts. on the revenue side, also a beat, 1.2 abo2.2 billion compar 1.9, the expected revenue number they also provided some very strong q3 revenue guidance expecting about 2.35 billion to 2.13 billion estimated on that they attributed some of the strength in the quarter to the end markets for self-driving
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cars and gaming. they also said that they would be returning $1.25 billion in the form of share repurchases and dividends to shareholders, and now we're seeing in after-hours trading the stock declining about -- a little over 5% here, and wheeling around a little bit we'll dig into this a bit more and we'll let you know what they find, kelly. >> michael, only a company -- they blew it out of the water on the top and bottom line, but the stock is up 170%. >> that's basically what we're talking about. not far off of its high before the report, so basically, up like a lot of other stocks that really have come in a lot. this one was a few dollars up from its 170 high so we'll see how it yo-yos around after hours. >> as it already has been strong guidance, too. just under 160 now, nvidia down 3.5% let's check in on shares of snap at last check down 7% after hour hand now they are down more than 11% after the company missed on earnings and revenue joining us was some reaction to
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these numbers is mark hauten along with a member of navy capital and trafd trainor joins us as well from new constructs i'll begin with the shareholder here what do you make of the quarter, the reaction to the stock, the various issues plaguing this company? how are you kind of divesting all of this? >> i then this was decent. the ad growth was really solid and the arpo was increased and there's a wall of stock out there from the last lockup and lockup on monday so it's hard to justify jumping in ahead of that. >> mark, do you think that's the main concern here. are the additional shares coming into the market? >> i think that's definitely a concern. for me the one thing that stood out from the numbers having to start to dissect them is while american daily users were a little bit higher than expected the arpo was lower than expected and that may prove to be one of the sticking points with people. >> that's because snapchat says
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we're focusing on north america largely. it's our most -- not only our best fit audience, the most lucrative one, so now our saying the average revenue per unit in in a region down 10% and they would want the opposite to be happening. >> down 10% from what was expect pedestrian, so missing the estimate, but i think it's important because at the moment advertisers are unsure they went from a position probably last year of giving them the benefit of the doubt. what i hear from major advertisers now is they are only trying dialing dollars for snap and they are very unsure. >> david, what about you with the company's shares down 12.5% now? >> the only people making money in this stock are bankers and insurers that's the trail you need to follow if you want to get a sense of where the money is being made otherwise i think we're dealing with a stock that has a fairly good chance of going to zero the only thing that will save it is if somebody wants to come in hand boy it at a bargain
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they are competitively boxed in. anything that they do, instagram copies instagram gave snap ma five-year head start on average daily users, and they almost have already doubled what snap has, so, i mean, who are we kidding here they don't have a competitive advantage and so far from making money. the valuation implies they will be extremely profitable. i don't know how you can make a straight face argument for how you grow the stock >> you have a huge technical hangup with the lockout coming and a huge exciting event with the iphone 8 rollout you haven't seen new content and new experiences from snap with the ipo. you've seen maps which prove to be pretty decent and now you have the iphone 8 come out which has twice the sensors that the new acer zen has it's a way to interact with brand in a virtual setting and,
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remember, when new iphones come out. you see a bigticup in average daily users as well as new futures. >> mikeal, are you excited about the face beautification tool >> this is news for me so maybe it's time for me to upgrade from the five which i don't think does have the beautification tools. i wonder though what you're looking for in terms of advertiser adoption. to mark's point, exactly shouldn't we be seeing a lot more momentum for the company at this stage of its mature. >> i think the main reason to get on snap hasn't hit yet there hasn't been an i need to be associated with this content yet. however, we're big believers that the ar features are the big reason in the next iphone and couple that with all the nbc rollouts such as the olympics, how are you going to ignore the olympics it doesn't work. >> mark, real quickly because you've also suggested this company can have a lot more downside what happens if google says we need a social presence and snap can give us one. well, that's the risk, are and i think had the risch uhere is one of risk. it could go to zero or 15 or 20
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if that happens, but why bother to get involved? just play with the big player, the man who dominates the market. >> well, there's $3 billion in cash and a strategic investor. i really doubt zero, i mean, way down the road maybe but we'll see, and you're referring to mark zuckerberg. >> exactly. >> thank you all it's time for had a cnbc news update let's get over to sue herera. >> hi again, kelly thanks so much here's what's happening at this hour, everyone flanked by vice president pence, president trump demanding that north korea get its act together or face extraordinary trouble. he said his previous warning of fire and fury might have been too soft. >> the people that were questioning that statement, was it too tough maybe it wasn't tough enough they have been doing this to our country for a long time, for many years, and it's about time that somebody stuck up to the people of this country and for the people of other countries,
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so if anything maybe that statement wasn't tough enough. >> amazon's chief jeff bezos tweeting it's a pleasure to host defense secretary james mattis at amazon headquarters in seattle after mattis made his first official visit to the defense inso vags unit called experimental in silicon valley the fda says at least five deaths have been reported in patients with gastric balloons the liquid-filled balloon systems are used to treat obesity. all the deaths occurred within a month after surgery, but exact cause of death is unclear at this point all right. you're up to date. that's the news update this hour kelly, i'll send it back downtown to you. >> thank you very much, sue. sue herera back at headquarter. stocks taking a dive into the close. looking a the dow closing down over 200 points. we haven't seen a move like that in quite some time up next, more about this move, if the selloff will continue into tomorrow. stay with us
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♪ ♪ i'm living that yacht life, life, life ♪ ♪ top speed fifty knots life on the caribbean seas ♪
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♪ it's a champagne and models potpourri ♪ ♪ on my yacht made of cuban mahogany, ♪ ♪ gany, gany, gany, gany ♪ watch this don't get mad (bell mnemonic) get e*trade and get invested welcome back the dow closing down just over 200 points today sam stovall is here from cfra with market reaction we may get tape playback from the president and that's relative to why we sold off today, isn't it, in terms of its earlier comments from north korea? >> yes, are kell de, i think so. i mean, we've had multiple days in which the dow was hitting all-time highs and valuations have remained fairly stretched at this point. the market i think was sort of due for some sort of digestion of these gains, and we were
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seeing divergence from the small caps so it made it vulnerable to exogenous events and the heated rhetoric between the u.s. and north korea certainly offered that >> so the nasdaq was down more than 2%, sam we also had weak data on the inflation front. the ten-year yield dropping. are these, you know, fundamental changes or just market panics over this tricky geopolitical event? >> well, i think right now, you can really see that it's tricky geopolitical events. when you look at the sector rotation that we saw today, it was your cyclicals that got beaten up the most technology, financials, but also consumer discretionary utilities were actually up if inflation was a really big worry and the fed would be raising rates aggressively, this bond proxy would probably not have been in positive territory. >> all right sam, thank you for joining us. sam stovall, and we're about to hear more from the president speaking about north korea let's list inn in.
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>> thank you very much we appreciate it we are having a meeting today. had a much larger group with us. this is the finals, but we discussed many things and one of them obviously was north korea we discussed venezuela we discussed afghanistan and the middle east generally. we had some very good meetings, some very good ideas and very good thoughts, and a lot of decisions were made. this was a very important day actually made a lot of decisions. with that, if you have any questions, yes >> did you make any decision on afghanistan in regard whether to add additional troops? >> yeah, we're getting close it's a very big decision for me. i took over a mess, and we're going to make it a lot less mess, but that has been a place
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17 years, our longest wars i read in one of your columns, and, frankly, it's -- it's going to be a decision that's going to be made very soon. >> and do you have full confidence in your national security adviser >> yes, i do general mcmaster, absolutely he's our friend. he's my friend, and he's a very talented man i like him, and i respect him. >> sir, why did you decide to announce the transgender ban reversal a couple of weeks ago, and are you betraying a community that you pledged to support? >> no, no. i have great respect for the community. i've had great support from that community. i got may lot of votes, but the transgender in the military is working on it now. they are doing the work. it's been a very difficult situation, and -- and i think i'm doing a lot of people a favor by coming out and just saying it. as you know, it's been a very complicated issue for the military it's been a very confusing issue
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for the milt, and i think i'm doing the military a great favor. >> mr. president, do you have any response to the russian president expelling 750 workers from our embassy >> no, i want to thank him because we're trying to cut down on payroll and as far as i'm concerned i'm very thankful that he let go of a large number of people because now we have a smaller payroll. there's no real reason for them to go back, so i -- i greatly appreciate the fact that they have been able to cut our payroll for the united states. we'll save a lot of money. >> mr. president, wrags it appropriate for the fbi to raid the home of paul manafort pre-dawn - >> i thought it was a very, very strong signal or whatever. i know mr. manafort, i haven't spoken to him in a long time, by know him he was with the campaign, as you know, for a very short period of time, relatively short period of time but i've always known him to be a good man i thought it was a very, you
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know, they do that very seldom so i was surprised to see it i was very, very surprised to see it we haven't really been involved. >> have you spoken to the fbi director about it? >> no, i have not. to do that early in the morning, whether or not it was appropriate, you'd have to ask them i've always found paul manafort to be a very decent man, and he's like a lot of other people, probably makes consultant fees from all over the place, who knows, i don't know, but i thought that was a very -- pretty tough stuff, to wake him up, perhaps hips family was there. that's pretty tough stuff. >> speaking of the attorney general, have you -- how would you categorize your relationship currently with attorney general sessions have you spoken about some of the differences that we've had in the past? >> it's fine it is what it is it's fine. he's working hard on the border. i'm very proud what have we've done on the border, very proud of general kelly what he's done on general kelly one of the reasons he's my chief of staff right now is he did such a outstanding job at the
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border we're down 78% nobody thought that would be -- in the old days with other administrations, if you were down 1% it was considered a big thing. we're down 78% at the border and nobody thought that was possible, so i'm very proud of general kelly. he's now chief of staff and at the same time i'm very proud of what we've done over the last six months between the supreme court, between tremendous amounts of legislation that's been passed. you know, we had 42 to 48 bills passed i'm not talking about executive orders, bills passed had massive executive orders we've got rid of record-setting amounts of regulations, and a lot is statutory where it's a 90-day period and then have you to wait and then it's another 90-day period and you have to wait and much more is coming out and i believe in regulation. you have to have some regulation, but we'll have a small percentage of regulation compared to what we have, and i think that's why you see business enthusiasms, the
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highest it's been in 18 years, why unemployment is the lowest that's been in 18 years, i mean. the unemployment rate has come out off. the lowest it's been in 18 years, and with that being said we have companies moving into the united states, whether it's foxconn. you saw the two large auto companies moving back. probably they will go to michigan, but they are negotiating with various states. we have had -- we have done a lot in a short period of time, so i'm very proud of it. i think that general kelly is going to be a fantastic chief of staff, however. >> mr. president, are you going to increase the u.s. military presence in asia >> we're going to look what's happening in asia. we're constantly looking at it it i don't like to signal what i'm going to be doing, but we're certainly looking at it, and obviously we're spending a lot of time looking at in particular north korea, and we are preparing for many different alternative events in north
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korea. he's disrespected our country greatly. he has said things that are horrific, and with me he's not getting away with it he got away with it for a long time between him and his family. he's not getting away with it. this is a whole new ball game, and he's not going to be saying those things, and he's certainly not going to be doing those things i read about him in guam by august 15th. let's see what he does with guam he does something in guam, it will be an event the likes of which nobody has seen before, what will happen in north korea. >> and when you say that, what do you mean? >> you'll see. you'll see, and he'll see. he will see. >> is that a dare? >> it's not a dare it's a statement has nothing to do with dare. that's a statement he's not going to go around threatening guam and he's not going to threaten the united states and he's not going to threaten japan and he's not going to threaten south korea. the no, that's not a dare, as
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you say. that is a statement of fact. >> mr. president, can you talk about the nuclear posture and what your priorities are in? >> yeah. nuclear to me, number one, i would like to de-nuclear the world. i know that president obama has said that global warming is the biggest threat i totally disagree i say that it's a simple one nuclear is our greatest threat worldwide. not even a question, not even close, so i would like to de-nuke the world. i would like russia and the united states and china and pakistan and many other countries that have nuclear weapons get rid of them but until such time as they do we'll be the most powerful nuclear nation on earth by far the first order i gave to my generals, as you know, you know, mike, my first order was i want this -- our nuclear arsenal to be the biggest and the finest in the world, and we spend a lot of money, a lot of time and a lot of effort, and it's in tip top
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shape and getting better, and getting stronger, and until such time as this scourge disappears, we'll be so much better and so much stronger than anybody else, and nobody, including north korea, is going to be threatening us with anything. >> sir, what specifically have you changed in the nuclear arsenal, and the reason that i ask is a lot of experts yesterday in response to your tweet said that modernizing the arsenal takes many years it can't be done in six months it's a long process that's only just begun. >> we've done a lot of modernization and we've done a lot of ren nation and we have it now in very, very good shape and it will be in much better shape over the next six months to a year. >> mr. president -- >> it's a very important thing actually, it's the first -- military is very northern to me. as you know, i did extremely well with the military vote, mike and i, but we are -- my first order was we have to do the military, but before we do
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the military per se, we're going to do the nuclear, and we had in very good shape. we'll be increasing our budget by many billions of dollars because of north korea and other reasons having to do with the anti-missile so we'll be increasing our budget by many billions of dollars. we'll probably be able to report that over the next week. as you know, we reduce it had by 5%, but i've decided i don't want that. we'll be increasing the anti-missiles by a substantial amount of billions of dollars. >> mr. president, can you speak of iran, speaking of nuclear deals, and whether you feel like that they are in compliance or will be in compliance. >> i don't think iran is in compliance we wrote them a very tough letter, as you know, to the congress i personally don't think they are in compliance, but we have time, and we tier going to see -- we also put down a lot of defaults or potential default situations
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i don't believe they are living up to the spirit of the agreement. president obama and his wisdom gave them $150 billion he gave them 1.8 billion in cash which is -- that's a hard one to figure but that was his decision. i think it's a horrible agreement. but they are not in compliance about the agreement, and they are certainly not in the spirit of the agreement in compliance, and i think you'll see some very strong things taking place if they don't get themselves-ins compliance, but i do not believe they are in compliance right now. >> mr. president, what's the latest on the leak investigation that the attorney general anoens nounsed late last week, and is there any separate investigations >> we're looking we're always looking you have two leaks, the leaks coming out ofp intelligence and various departments, having to do with syria and all sorts of different places, having to do frankly with north korea and those are very serious and then you have the leaks where people want to love me, and they are all fighting for love. those are not very important,
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but certainly we don't like them those are lyle inner white house leaks. they are not very important, but actually i'm somewhat honored by them, but the important leaks to me, and the leaks that the attorney general is looking halt very strongly, are the leaks coming out of intelligence, and we have to stop them for the security and the national security of our country. >> mr. president, you were passing some notes to the council bob york can you talk a little bit about that we're working with them. we have a situation which is very unusual everybody said there's no conclusion, you look at the councils that come in. we have a senate hearing we have judiciary and we have intelligence and a house hearing and everybody walks out, even the enemies, i said, no, there's no collusion, no collusion they are investigating something that never happened. there was no collusion between us and russia. in fact, the opposite. russia spent a lot of money on fighting me, and if you think about it, i want a strong
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military you see our budget is up by -- it will be hundred of billions of dollars soon. our military budget. russia doesn't like that hillary was going to cut the budget substantially, the military budget. russia is very important for russia oil oil and gas. we are now an exporter because of an incredible six months that i've, an exporter of oil and gas. that's bad for russia. i always said i don't think russia wants me because i want a strong military and i want low energy prices. energy is a disaster, low energy prices is a disaster for russia. additionally, it is seems that rush spent a lot of money on that false report, and that was russian money, and i think it was democrat money, too. you can say that was collusion, plus, the democrats colluded on the ukraine, so they colluded, and then when you get down to it, why isn't the fbi looking at the dnc server you have a server that they refused,
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the democrats refused to give to the fbi. now, i don't know how the fbi can investigate something if the dnc, the democrats refused to give the server. so we have an investigation of something that never took place, and never took place and all i say is work with them because this is an event that never took place now, as far as somebody elsewhere did they file the right papers or forget to file a paper? you know, i guarantee you, if you went around and looked at efb that made a speech, whatever these people did, that's up to them did they do something wrong because they didn't file the right document probably a lot of people in washington did the same thing. >> mr. president, given your harsh criticism, how are you going to bring the new inspection >> we'll have to see i'm not sure we'll bring them in maybe we will, maybe we won't. i think the infrastructure bill will be b bipartisan i may have more support from the democrats. i want a strong infrastructure
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bill we have at p moment, spent over $6 trillion in the middle east as far as i'm concerned, we've wasted $6 trillion in the middle east and yet can't fix our roads, bridges, schools and airports and that's a very sad situation, so i'm very strong on infrastructure and a lot of republicans are are, but democrats are, also. i think that will work out very well >> mr. president, you thought about considered leading the dismissal of the special counsel? if anything bob mueller could do that would send you in that direction? >> i've been reading about it from you people. i'm not dismissing anybody i want them to get op with the k, but i want the senate and house to come out with their findings junl idge frg the people leavine meetings, they say, no, we haven't found collusion. there is none. you know why because i don't speak to
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russians i won because i suppose i was a much better candidate. i went to michigan i won pennsylvania i fought a smart battle. i didn't win because of russia russia had nothing to do with me winning. the thing that we had a great team and i guess i did a good job and you know what, honestly, they spent much more money than i did by a lot you know that. they spent a lot more money and honestly, they did not do a very good job b of campaigning. >> one more question about senate leader mcconnell. have you reached out to him since your phone call yesterday? >> no. >> had you given any consideration into asking his wife, your transportation secretary, to help bridge whatever -- z >> elaine is doing a very good job as secretary of transportation she's doing a very, very good wife i'm very disappointed in mitch but if he gets these bills passed, i'll be very happy with
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him. honestly, repeal and replace of obamacare should have taken place and should have been on my desk the first week or o first day i was there. i've been hearing about it for seven years. so, repeal and replace should have taken place the tax bill, tax cuts, tax reform hopefully, they get that done. i hope they get it done. and the other thing would be the infrastructure bill. in addition to that, you know, we've passed a lot of things accountability with the va a lot. we're doing a lot of great work at the va. and we're doing a lot of great work all over. you look at happening with the ministry, where they're putting on i look at west virginia the other day, i was in west virginia making a speech and they are doing great as a state. the great governor of west virginia, jim, who you saw, he just became a republican he left, first time in many, many years that a thing like that's happened. he just left the democratic party and became a republican.
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which is a great moment. hasn't happened in many, years we think it's been an incredible -- a lot of record setting businesses, you look at what's going on with the economy and you know, to me, you look at the enthusiasm of businesses you look at companies moving back in. you just saw on friday, the two big car companies coming in. last week, fox con they make the iphones. they make the, they're the biggest in the world they're coming into wisconsin with an unbelievable plant like we've never seen before. and i actually said to tim cook of apple, i said, you know, tim, i won't consider myself successful as president unless i see you start building those big, beautiful plants that you have all over china. you start billing them in the united states and he's going to do that. >> you were critical about the intelligence in the iraq war can we trust the intelligence
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now? >> well, you know, it's different intelligence i have mike. i have great confidence in him doesn't mean i had confidence in his predecessor, which i didn't, actually, although he did say good things about me he did say he had no information on collusion, but i will say it. but i have tremendous confidence in mike. dan coates fantastic. we have people i think your new head of the fbi, i think i've done a great service for this country i think that christopher will do a fantastic job as the head of the fbi. so, look, i have nobody has greater respect for intelligence than donald trump. but you have to have the right leaders. i think we have great leaders right now. and you know, you could look at the intelligence over the years. it was intelligence that got people to make the one of the worst decisions ever made in the history of our country going into iraq because they said
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there were no weapons you know, you look at it it ended up being no weapons of mass destruction they said we listen to them, weapons of mass destruction were all over the place, but they were not there that was intelligence. i have great respect for intelligence as led by the people that i have in charge now. we have great people and i think, i think it's going to lead us to tremendous victories and that's what we need. >> what was intelligence telling you about north korea? >> a lot of things, but you'll probably find out about it before anybody else, right with your leaks. we got to stop the leaks they're very dangerous for our country. but i have great respect for the intelligence community and i think with the leadership we have right now, hopefully, it will be a very, very successful eight years for this country and then after that, we'll continue onward, but we have a lot of things we have to straighten out. you have the middle east you have north korea we have a lot of places of tremendous conflict and
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tremendous danger for this country. i will say getting the 15-0 vote at the united nations from security counsel the other day, that's something that very few presidents would have been able to get and have great respect for the fact that china and russia went along with it. that was a tremendous day for the united states. i think it will have a strong impact i don't know if it will be the end all, but i think it will be a big impact on north korea and what they're doing thank you very much. thank you rch. appreciate it. thanks >> president trump speaking for about 20 minutes there the second time today he specifically addressed north korea, but also a host of other issues this afternoon. kay kayla, you mentioned a couple of headlines earlier with regards to his confidence in mcmaster. he spoke about the strategy in afghanistan, but then on a number of other things as well what did you hear? >> it was a wide ranging press availability he answered the most questions
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from reporters that he has since february so, certainly there were a lot of burning questions from reporters about a whole host of issues he expressed confidence in members of his cabinet he was dismissive of the events at the center of the russia investigation. he talked about his budget about having a military budget as soon as next week possibly and also thanking russia for the expulsion of nearly 800 diplomats saying he had been meaning to cut the payroll any way. where he had, he was talking up this strength and power of the u.s.'s nuclear arsenal, but today in those comments, saying that nuclear power is the greatest threat to the world right now. kelly. >> that's for sure in the long run is when we'd like to see those nukes done away with. you were watching futures. >> looks like they were ticking down i don't know if there's any specific take away there i think in terms of the hierchy of headlines, probably thanking
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putin for expelling those diplomats is probably going to be the big dwrab grabber, but in terms of policy implication, i don't know that the market is viewing his responses to questions, saying this is some kind of calibrated policy statement of what's going to happen next. yes, you want to get infrastructure done, but beyond saying that, where does that take us? >> i wonder what the senate is taking melissa, we knew some of the substance om of these remarks and the dow drops 205, but do you think this further color about guam and see what he does. do you think that takes us into tomorrow >> this commentary this afternoon, not the most recent piece of tape we were just listening to, but the tape that happened in the 2:00 hour this afternoon. that really reminds me of the fire and fury rhetoric where the markets had a delayed reaction this time around, because it's a second go, because trump sort of
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doubled down on that, the only sort of concession he made was saying he was still open to negotiations but we saw that tumble into the close on higher than average volume over the spike. that is really going to lull a lot of funds out there, which are built on low volatility, o we saw this spike and they sell swoot clopoot close and that's t happened the question now is does this continue into four, tomorrow, in terms of the market sell off and how does the market site just overnight. we have seen the reaction overseas sharper than here in the united states in the past couple of days, so that will be interesting to see all right. thank you, kelly want the bring in the rest of the desk on this big market day. guy, what did you make of the sell off

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